[Federal Register Volume 67, Number 19 (Tuesday, January 29, 2002)]
[Notices]
[Pages 4257-4260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2108]


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FEDERAL RESERVE SYSTEM


Agency Information Collection Activities: Proposed Collection; 
Comment Request

AGENCY: Board of Governors of the Federal Reserve System.

SUMMARY:   
    Background.--On June 15, 1984, the Office of Management and Budget 
(OMB) delegated to the Board of Governors of the Federal Reserve System 
(Board) its approval authority under the Paperwork Reduction Act, as 
per 5 CFR 1320.16, to approve of and assign OMB control numbers to 
collection of information requests and requirements conducted or 
sponsored by the Board under conditions set forth in 5 CFR 1320 
Appendix A.1. Board-approved collections of information are 
incorporated into the official OMB inventory of currently approved 
collections of information. Copies of the OMB 83-Is and supporting 
statements and approved collection of information instruments are 
placed into OMB's public docket files. The Federal Reserve may not 
conduct or sponsor, and the respondent is not required to respond to, 
an information collection that has been extended, revised, or 
implemented on or after October 1, 1995, unless it displays a currently 
valid OMB control number.
    Request for comment on information collection proposals.--The 
following information collections, which are being handled under this 
delegated authority, have received initial Board approval and are 
hereby published for comment. At the end of the comment period, the 
proposed information collections, along with an analysis of comments 
and recommendations received, will be submitted to the Board for final 
approval under OMB delegated authority. Comments are invited on the 
following:
    a. Whether the proposed collection of information is necessary for 
the proper performance of the Federal Reserve's functions; including 
whether the information has practical utility;
    b. The accuracy of the Federal Reserve's estimate of the burden of 
the proposed information collection, including the validity of the 
methodology and assumptions used;
    c. Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    d. Ways to minimize the burden of information collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology.

DATES: Comments must be submitted on or before April 1, 2002.

ADDRESSES: Comments may be mailed to Ms. Jennifer J. Johnson, 
Secretary, Board of Governors of the Federal Reserve System, 20th 
Street and Constitution Avenue, NW., Washington, DC 20551. However, 
because paper mail in the Washington area and at the Board of Governors 
is subject to delay, please consider submitting your comments by e-mail 
to [email protected], or faxing them to the Office of 
the Secretary at 202-452-3819 or 202-452-3102. Comments addressed to 
Ms. Johnson may also be delivered to the Board's mail facility in the 
West Courtyard between 8:45 a.m. and 5:15 p.m., located on 21st Street 
between Constitution Avenue and C Street, NW. Members of the public may 
inspect comments in Room MP-500 between 9 a.m. and 5 p.m. on weekdays 
pursuant to 261.12, except as provided in 261.14, of the Board's Rules 
Regarding Availability of Information, 12 CFR 261.12 and 261.14.
    A copy of the comments may also be submitted to the OMB desk 
officer for the Board: Alexander T. Hunt, Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 3208, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: A copy of the proposed form and 
instructions, the Paperwork Reduction Act Submission (OMB 83-I), 
supporting statement, and other documents that will be placed into 
OMB's public docket files once approved may be requested from the 
agency clearance officer, whose name appears below.
    Mary M. West, Federal Reserve Board Clearance Officer, (202) 452-
3829, Division of Research and Statistics, Board of Governors of the 
Federal Reserve System, 20th and C Streets, NW., Washington, DC 20551. 
Telecommunications Device for the Deaf (TDD) users may contact Capria 
Mitchell (202) 872-4984, Board of Governors of the Federal Reserve 
System, 20th and C Streets, NW., Washington, DC 20551.

Proposal To Approve Under OMB Delegated Authority the Extension for 
Three Years, Without Revision, of the Following Reports

    1. Report titles: Registration Statement for Persons Who Extend 
Credit Secured by Margin Stock (Other Than Banks, Brokers, or Dealers); 
Deregistration Statement for Persons Registered Pursuant to Regulation 
U; Statement of Purpose for an Extension of Credit Secured by Margin 
Stock by a Person Subject to Registration Under Regulation U; Annual 
Report; Statement of Purpose for an Extension of Credit by a Creditor; 
and Statement of Purpose for an Extension of Credit Secured by Margin 
Stock.
    Agency form numbers: FR G-1, FR G-2, FR G-3, FR G-4, FR T-4, FR U-
1.
    OMB control numbers: 7100-0011: FR G-1, FR G-2, FR G-4; 7100-0018: 
FR G-3; 7100-0019: FR T-4; and 7100-0115: FR U-1.
    Frequency: FR G-1, FR G-2, FR G-3, FR T-4, and FR U-1: on occasion 
FR G-4: annual.
    Reporters: Individuals and business.
    Annual reporting hours: 1,901 reporting; 252,978 recordkeeping.
    Estimated average hours per response: FR G-1: 2.5 hours; FR G-2: 15 
minutes; FR G-3: 10 minutes; FR G-4: 2.0 hours; FR T-4: 10 minutes; and 
FR U-1: 10 minutes.
    Number of respondents: FR G-1: 98; FR G-2: 65; FR G-3: 500; FR G-4: 
820; FR T-4: 250; and FR U-1: 6,971.
    Small businesses are affected.
    General description of report: These information collections are 
mandatory (15 U.S.C. 78g). The information in the FR G-1 and FR G-4 is 
given confidential treatment (5 U.S.C. 552(b)(4)). The FR G-2 does not 
contain confidential information. The FR G-3, FR T-4, and FR U-1 are 
not submitted to the Federal Reserve and, as such, no issue of 
confidentiality arises.
    Abstract: The Securities Exchange Act of 1934 ('34 Act) authorizes 
the Board to regulate securities credit issued by banks, brokers and 
dealers, and other lenders. The purpose statements, FR U-

[[Page 4258]]

1, FR T-4, and FR G-3, are recordkeeping requirements for banks, 
brokers and dealers, and other lenders, respectively, to document the 
purpose of their loans secured by margin stock. Other lenders also must 
register and deregister with the Federal Reserve using the FR G-1 and 
FR G-2, respectively, and must file an annual report (FR G-4). The 
Federal Reserve uses the data to identify lenders subject to Regulation 
U, to verify compliance with Regulations T, U, and X, and to monitor 
margin credit.

Proposal To Approve Under OMB Delegated Authority the Extension for 
Three Years, With Revision, of the Following Reports

    1. Report title: Annual Daylight Overdraft Capital Report for U.S. 
Branches and Agencies of Foreign Banks.
    Agency form number: FR 2225.
    OMB control number: 7100-0216.
    Frequency: Annual.
    Reporters: Foreign banks with U.S. branches or agencies.
    Annual reporting hours: 44.
    Estimated average hours per response: 1.0.
    Number of respondents: 44.
    Small businesses are not affected.
    General description of report: This information collection is 
voluntary (12 U.S.C. 248(i), 248-1, and 464) and is not given 
confidential treatment.
    Abstract: This report was implemented in March 1986 as part of the 
procedures used to administer the Federal Reserve Board's Payments 
System Risk (PSR) policy. A key component of the PSR policy is a limit, 
or a net debit cap, on an institution's negative intraday balance in 
its Federal Reserve account. The Federal Reserve calculates an 
institution's net debit cap by applying the multiple associated with 
the net debit cap category to the institution's capital. For foreign 
banking organizations (FBOs), a percentage of the FBO's capital 
measure, known as the U.S. capital equivalency, is used to calculate 
the FBO's net debit cap. Currently, an FBO with U.S. branches or 
agencies may voluntarily file the FR 2225 to provide the Federal 
Reserve with its capital measure. Because an FBO that files the FR 2225 
may be able to use its total capital in the net debit cap calculation, 
an FBO seeking to maximize its daylight overdraft capacity may find it 
advantageous to file the FR 2225. An FBO that does not file FR 2225 may 
use an alternative capital measure based on its nonrelated liabilities.
    Current Actions: The Federal Reserve Board has revised its PSR 
policy regarding the calculation of an FBO's net debit cap, described 
in detail in the Federal Register notice published December 13, 2001 
(66 FR 64419). The revised PSR policy modifies the criteria used to 
determine the U.S. capital equivalency for an FBO. There are no changes 
to the FR 2225 reporting form; however, the reporting instructions 
would be modified to correspond with the revised policy. The proposed 
revisions to the FR 2225 instructions would be effective during the 
first quarter of 2002 and are summarized below.
    The revised PSR policy (1) eliminates the Basle Capital Accord 
(BCA) criteria and replaces it with the strength of support assessment 
(SOSA) rankings and financial holding company (FHC) status in 
determining U.S. capital equivalency for an FBO, (2) raises the 
percentage of capital used in calculating U.S. capital equivalency for 
certain FBOs, and (3) revises the definition of an alternative measure 
for U.S. capital equivalency. The SOSA ranking is composed of four 
factors, including the FBO's financial condition and prospects, the 
system of supervision in the FBO's home country, the record of the home 
country's government in support of the banking system or other sources 
of support for the FBO; and transfer risk concerns. Transfer risk 
relates to the FBO's ability to access and transmit U.S. dollars, which 
is an essential factor in determining whether an FBO can support its 
U.S. operations. The SOSA ranking is based on a scale of 1 through 3, 
with 1 representing the lowest level of supervisory concern.
    Specifically, the revised PSR policy allows U.S. capital 
equivalency to equal the following:
     35 percent of capital for FBOs that are FHCs;
     25 percent of capital for FBOs that are not FHCs and have 
a strength of support assessment ranking (SOSA) of 1;
     10 percent of capital for FBOs that are not FHCs and are 
ranked a SOSA 2;
     5 percent of ``net due to related depository 
institutions'' for FBOs that are not FHCs and are ranked a SOSA 3.
    2. Report title: Report of Net Debit Cap
    Agency form number: FR 2226.
    OMB control number: 7100-0217.
    Frequency: Annual.
    Reporters: depository institutions, Edge and agreement 
corporations, U.S. branches and agencies of foreign banks.
    Annual reporting hours: 1,902.
    Estimated average hours per response: 1.0.
    Number of respondents: 1,902.
    Small businesses are not affected.
    General description of report: This information collection is 
mandatory (12 U.S.C. 248(i), 248-l, and 464) and may be accorded 
confidential treatment under the Freedom of Information Act (5 U.S.C. 
552 (b)(4)).
    Abstract: The Federal Reserve Board's Payment System Risk (PSR) 
policy relies in part on the efforts of individual institutions to 
identify, control, and reduce their exposure. The Federal Reserve 
collects these resolutions annually to provide information that is 
essential for their administration of the PSR policy. The Report of Net 
Debit Cap currently comprises three resolutions, located in Appendix B 
of the Guide to the Federal Reserve's Payments System Risk Policy, 
which are filed by an institution's board of directors depending on the 
institution's needs. Two of the three resolutions are used by 
institutions to establish a capacity for daylight overdrafts that is 
greater than the capacity that is typically assigned by a Reserve Bank. 
The first resolution is used to establish a self-assessed net debit 
cap, whereas the second resolution is used to establish a de minimis 
net debit cap. The third resolution is used by institutions to 
establish an interaffiliate transfer arrangement.
    Current Actions: The Federal Reserve Board has revised its PSR 
policy regarding additional collateralized capacity and interaffiliate 
transfer arrangements described in detail in the Federal Register 
notice published December 13, 2001 (66 FR 64419). The Federal Reserve 
proposes to add a two-part model resolution to Appendix B used to 
establish additional collateralized capacity and eliminate the model 
resolution used to establish an interaffiliate transfer arrangement. In 
addition, the order of the model resolutions in Appendix B would be 
changed. The proposed revisions are described below in detail and would 
be effective during the first quarter of 2002.

Proposed Revisions to Appendix B

     Collateralized Capacity (3a)--Depository institutions with 
self-assessed net debit caps that request additional daylight overdraft 
capacity must submit, to their Administrative Reserve Banks, written 
justification to support the request for the additional capacity. In 
evaluating a depository institution's request, the Administrative 
Reserve Bank will review the institution's daylight overdraft levels 
and financial condition. If the Administrative Reserve Bank approves 
the request, the depository institution will need to file the proposed 
collateralized capacity resolution. This proposed resolution was 
designed to specify the amount, if any, of Reserve

[[Page 4259]]

Bank approved collateral pledged and the maximum daylight overdraft 
capacity amount.
     Collateralized Capacity: Supplement for Securities In-
transit (3b)--If a depository institution has been approved to receive 
additional collateralized daylight overdraft capacity and pledges 
securities in transit to support the additional capacity, the 
depository institution would need to file a new resolution 3b. The 
Administrative Reserve Bank may accept securities in transit on the 
Fedwire book-entry securities system as collateral to support an 
institution's maximum daylight overdraft capacity level. Securities in 
transit refer to book-entry securities transferred over Fedwire's 
National Book-Entry System that have been purchased by a depository 
institution, but not yet paid for and owned by the institution's 
customers. In transit collateral differs from stable pool collateral in 
that the value of in transit collateral regularly fluctuates intraday 
where as the value of stable pool generally does not.
     Inter-Affiliate Transfer Arrangements--The rescission of 
the interaffiliate transfer policy rule is effective on December 31, 
2001, at which time depository institutions would no longer be required 
to submit a resolution to establish an interaffiliate agreement.
    The order of the model resolutions located in Appendix B would be 
changed to:
     De Minimis Cap;
     Self-Assessment Cap;
     Collateralized Capacity (3a);
     Collateralized Capacity: Supplement for Securities In-
transit (3b);
    3. Report titles: Application for Prior Approval to Become a Bank 
Holding Company, or for a Bank Holding Company to Acquire an Additional 
Bank or Bank Holding Company; Notice for Prior Approval to Become a 
Bank Holding Company, or for a Bank Holding Company to Acquire an 
Additional Bank or Bank Holding Company; and Notification for Prior 
Approval to Engage Directly or Indirectly in Certain Nonbanking 
Activities.
    Agency form numbers: FR Y-3, FR Y-3N, and FR Y-4.
    OMB control number: 7100-0121.
    Frequency: Event-generated.
    Reporters: Corporations seeking to become bank holding companies, 
or bank holding companies and state chartered banks that are members of 
the Federal Reserve System.
    Annual reporting hours: 22,003.
    Estimated average hours per response: FR Y-3, Section 3(a)(1): 49 
hours; FR Y-3, Section 3(a)(3) and 3(a)(5): 59.5 hours; FR Y-3N, 
Sections 3(a)(1), 3(a)(3), and 3(a)(5): 5 hours; FR Y-4, complete 
notification: 12 hours; FR Y-4, expedited notification: 5 hours; and FR 
Y-4, post-consummation: 0.5 hours.
    Number of respondents: 823.
    Small businesses are affected.
    General description of reports: This information collection is 
mandatory (12 U.S.C. 1842(a)(1), 1844(c), and 1843(c)(8)) and may be 
accorded confidential treatment under the Freedom of Information Act (5 
U.S.C. 552 (b)(4)).
    Abstract: The Federal Reserve requires the application and the 
notifications for regulatory and supervisory purposes and to allow the 
Federal Reserve to fulfill its statutory obligations under the Bank 
Holding Company Act of 1956 (the BHC Act). The forms collect 
information concerning proposed BHC formations, acquisitions, and 
mergers, and proposed nonbanking activities. The Federal Reserve must 
obtain this information to evaluate each individual transaction with 
respect to permissibility, competitive effects, adequacy of financial 
and managerial resources, net public benefits, and impact on the 
convenience and needs of affected communities.
    Current Actions: Most of the proposed additions and substitutions 
to the FR Y-3 and the FR Y-3N and the proposed deletions to the FR Y-4 
are necessary because of the passage of the Gramm-Leach-Bliley Act (GLB 
Act) in 1999. These proposed revisions are necessary since the 
organization submitting the filing may be seeking to become or already 
may be a financial holding company (FHC). The proposed revisions point 
out additional requirements that may apply to those types of 
organizations. The remaining proposed revisions to the FR Y-3 and the 
FR Y-3N are technical in nature and attempt to (1) further clarify the 
current application requirements for banking organizations, (2) ensure 
consistency of phrasing within the form, and, in several instances, (3) 
simply suggest effective means (such as early contact with the 
appropriate Reserve Bank) that generally reduce or avoid potential 
processing delays in the application process. The proposed revisions 
are discussed in detail below.
FR Y-3
    The Instructions to the FR Y-3 would be modified to reflect that 
the applicant may either be, or seek to become, a FHC in connection 
with the proposed transaction. One of the proposed revisions directs 
the applicant to those portions of Regulation Y (sections 225.81 and 
225.82, or sections 225.90, 225.91, and 225.92) that outline the 
requirements for a declaration that may be included as part of a FR Y-3 
filing. Another proposed revision recognizes the need for a FHC, 
seeking to acquire a depository institution that is not well-
capitalized or well-managed, to contact the appropriate Reserve Bank 
regarding the development and execution of an acceptable supervisory 
agreement. An agreement acceptable to the Board must outline the 
actions to be taken to address the target's deficiencies and outline 
any other limitations on the activities of the applicant that would 
apply until those deficiencies are satisfactorily addressed. Early 
contact regarding this requirement generally reduces overall burden on 
the applicant organization and avoids potential processing delays. 
Another proposed revision (question 11) recognizes the broader range of 
nonbanking activities (and related new authorities) that a BHC may 
initiate through a proposed transaction if it also is a FHC.
    The proposed changes to the ``Preparation of Application'' section 
clarifies that applications may be formally accepted for processing 
when substantially complete (rather than complete). In an effort to 
reduce uncertainty and ensure consistent financial information, the 
proposed new section also directs users of the FR Y-3 to the 
Interagency Biographical and Financial Report (FR 2081c; OMB No. 7100-
0134), which was issued in 2000 for the collection of personal data on 
individuals involved in banking proposals.
    The ``Preliminary Charter Approval'' section would be expanded to 
encourage early contact with the appropriate Reserve Bank during the 
chartering process. Early contact regarding such proposals has 
generally facilitated the review of applications and resulted in 
shorter processing periods.
    The ``Competitive and Convenience and Needs'' section (questions 10 
and 11) would be modified to reflect the current standards and 
approaches with respect to competitive analysis, including the 
importance of specific products and markets.
    The remaining proposed changes are clarifications intended to make 
the FR Y-3 internally consistent with respect to wording.
FR Y-3N
    The proposed revisions primarily are limited to one new section in 
the

[[Page 4260]]

instructions that recognizes that the applicant may either be or seek 
to become a FHC. The brief section recognizes the need for a related 
declaration if the notificant also seeks to become a FHC and also 
recognizes that the streamlined procedures of the FR Y-3N procedures 
may not be appropriate for foreign banking organizations seeking to 
become FHCs or for FHCs seeking to acquire an insured depository that 
is not well capitalized or well managed. The proposed revisions also 
would delete a reference to using the form for proposals involving the 
acquisition of nonbank insured depository institutions.
FR Y-4
    The proposed modifications to the FR Y-4 form include two deletions 
that became necessary when the GLB Act eliminated the Board's ability 
to approve new nonbanking activities under section 4(c)(8) of the BHC 
Act. Both proposed deletions refer to activities not previously 
approved by the Board. The other proposed revisions clarify the 
additional information and publication requirements that must be 
satisfied if the proposal involves a nonbank insured depository 
institution. No other revisions are necessary as the overall standards 
applicable to notifications filed under section 4(c)(8) of the BHC Act 
otherwise remain the same.

    Board of Governors of the Federal Reserve System, January 23, 
2002.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 02-2108 Filed 1-28-02; 8:45 am]
BILLING CODE 6210-02-P